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McCombs Fall Case Competition

Redefining the future of grocery retail

11/7/2015

About us
Alex Finley
Corporate Strategy
Alex.Finley@walmart.com

Bora Manellari
Finance and Reporting
Global eCommerce
bmanellari@walmart.com

Agenda

11 Walmart -Overview
22 Walmart U.S. Strategy
33 Walmart U.S. Grocery business
44 Case Competition Prompt

Walmart by the numbers

11
eCommerce websites

$485 Billion

customers per week

63

in revenue

operating banners

28
operating countries

260 Million

11,500+
stores around the globe

Our global footprint


Canada 395

UK 614
China 416
US Walmart 4,588
Sams
651

Japan 356

Mexico 2,303
Central America 692

India 20
Brazil 559

Chile 388

Africa 403
Argentina 108

* Store count as of July 31, 2015


5

Our businesses
Geography: US
Net Sales: $288B
Stores: 4,516
Associates: ~1.2M
Over the past two years, weve hired over
80K veterans
Geography: US
Net Sales: $58B
Clubs: 647
Associates: ~110K
Last year, we more than doubled
our organic portfolio
6

Geography: 27 countries
Net Sales: $141B
Stores: 6,290
Associates: ~800K
Last year, ASDA doubled its
click & collect sites

Geography: 11 countries
Net Sales: $12.2B
We increased walmart.com assortment
60% in FY15 (to 8M items)

Our businesses
Geography: US
Net Sales: $288B
Stores: 4,516
Associates: ~1.2M
Over the past two years, weve hired over
80K veterans
Geography: US
Net Sales: $58B
Clubs: 647
Associates: ~110K
Last year, we more than doubled
our organic portfolio
7

Geography: 27 countries
Net Sales: $141B
Stores: 6,290
Associates: ~800K
Last year, ASDA doubled its
click & collect sites

Geography: 11 countries
Net Sales: $12.2B
We increased walmart.com assortment
60% in FY15 (to 8M items)

Walmart U.S. our ambition


Regain share and lead in the next generation of retail
Competing on price alone is no longer enough

Assortment
and Price

Experience

Access

We must fix the core and invest for the future


8

Improving experience by running better stores


Return to service basics
Clean

Fast

Strengthen partnerships with Associates


Starting wages increased
More choice in scheduling
Enhanced training and
development

Friendly

In-stock

Improve store operating model


Added department manager
positions
Aligning store incentives to
support service basics

Improving assortment
Focus on improving Fresh and ensuring store and online
strategies best serve customers

Optimize assortment depth and breadth while helping


stores run as efficiently as possible

Utilize improved tools and capabilities to effectively deliver


EDLP with consistent execution across the business

10

We have a history of innovation

Discount
retail

Grocery

Wholesale
11

eCommerce

International

Omni-channel

We have a history of innovation


Focus on fresh
Improve private brands
Enhance convenience
Discount
retail

Wholesale
12

eCommerce

Grocery

International

Omni-channel

Win in Fresh

Assortment
Execution
Processes
Supply chain

13

Win in Fresh
Organics

14

Private Brands
Building customer
loyalty

Compete against hard


discounters

Complement to
national brands

Increase market
penetration

15

Convenience
16

Creating a Seamless
Shopping Experience

Online Grocery

17

Creating a Seamless
Shopping Experience

Pickup

18

Creating a Seamless
Shopping Experience
Pickup
Easy

Convenient
Fast

I was in and out.

19

Free

Innovating to provide access anytime, anywhere


Expanding eCommerce to
grocery

20

Integrating mobile into our


stores and clubs

Reinventing the
supercenter

McCombs Fall Case Competition


Redefining the future of grocery retail

11/7/2015

Case challenge prompt 2015: Grocery competition


in Walmart U.S.

22

Situation
The grocery industry is quickly evolving in order to meet customer demands.
Retailers are challenged to find ways to stay relevant and engaged with
customers locally, through convenience, quality, and assortment, while
maintaining a competitive pricing strategy.
Complication:
Competitors have been quickly innovating and stealing share from Walmart
Walmart faces pressure from deep discounters, e.g., Aldi, as well as,
retailers offering more premium and convenient options
Question:
What actions should Walmart take to better compete and remain
competitive in the long-term with a local grocery competitor (e.g. HEB,
Whole Foods, Randalls, Sprouts Famers Market)? Pick one

Thought starters:

What is Walmarts value proposition and brand? How can we better compete while
remaining true and reinforcing this position and brand?

Who is our customer, and how do we increase both share of wallet and share of
market, i.e., growing with our existing base while simultaneously attracting new
customers? Be sure to fully understand our customer dynamics, it might be different
than you think.

Why do customers choose to shop at this competitor over Walmart? (How is this
competitor creating loyalty?) How can we appeal to this customer need while keeping in
mind the above questions? Are there adjacent products/services we should consider?

Are there any current Walmart initiatives that we should accelerate or improve upon? If
so, how? Conversely, are there any current Walmart initiatives that we should stop?

How should we prioritize any new initiatives or programs you propose?


23

Q A
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